Proposition 103 – 5-Year Tax Increase for Public Education

Prop 103 is a citizens’ initiative spearheaded by Rollie Heath, a state senator from Boulder. It proposes temporarily increasing the state income tax rate from 4.63% to 5% and the state sales and use tax from 2.9% to 3% for five years. Supporters point out that Prop 103 would restore tax rates to the levels in the late 1990s. The state would have to fund public education from preschool through college for the next five years using level of the 2011-12 school year plus the additional revenue from these tax increases.

Colorado is having a tough time balancing its books. The Colorado Fiscal Policy Institute bandied about some progressive tax proposals for consideration for this year’s ballot. They would have brought in more revenue than Prop 103, but the general feeling is that voters don’t have much of a stomach for a tax increase and that there will be plenty of opposition from organized groups. Colorado is the only state in the nation with a tax increase on its 2011 statewide ballot. Probably not coincidentally, Colorado is also the only state with all the strict requirements of TABOR.

Spending for education currently takes up half of the state’s general fund. The state is limited in how much it can cut some items, such as prisons and Medicare. Higher education in Colorado is not protected and has been hit particularly hard. Amendment 23, passed by the voters in 2000 was designed to ensure that K-12 education funding grew at the rate of inflation with an additional 1% for the first 10 years. For the state’s 2009-10 fiscal year the legislature redefined “base per pupil funding” so even Amendment 23 didn’t protect K-12 education.

This ballot measure would help some districts more than others. Boulder Valley School District voters have been generous with their dollars so BVSD doesn’t need the money as much as many other districts. (See the 2010 BVSD ballot issue 3A.) Proponents estimate that Prop 103 would restore $532 per student in BVSD versus $1,167 per student in Silverton School District.

Boulder would like to see a big, temporary increase in the University of Colorado’s funding if Prop 103 passes, but Prop 103 doesn’t specify how the new revenue would be divided among the various recipients.

A side note – Meanwhile, the state has been sued in Lobato v. State of Colorado. Plaintiffs claim that the system of education in CO is not “thorough and uniform” and therefore violates the state constitution. The case has been heard, and interested parties are awaiting the judge’s ruling.

Recommendation: yes

Education is an critical part of any successful nation and democracy. Prop 103 will not solve education problems in Colorado. Its supporters acknowledge that the proposal is only a temporary fix. The plan is to work hard toward a longer term fix to the state’s budget situation during the 5-year temporary tax increase. Otherwise we could see fights in Colorado similar to those that we are seeing nationally over the continuation of the Bush tax cuts.

Whether or not Prop 103 passes, the state needs to work on a long-term fix to its budget woes. Meanwhile, Prop 103 would help fund education in a state that is at or near the bottom of the nation in education funding.


Website for the Yes side (Support Schools for a Bright Colorado)
http://brightcolorado.com/

Websites for the No side
(Too Taxing for Colorado)
http://www.tootaxing.org/
(Save Colorado Jobs)
http://savecoloradojobs.org/


Proposition 103 (STATUTORY) (Approved Ballot Language)

SHALL STATE TAXES BE INCREASED $536.1 MILLION ANNUALLY IN THE FIRST FULL FISCAL YEAR AND BY SUCH AMOUNTS AS ARE RAISED ANNUALLY THEREAFTER BY AMENDMENTS TO THE COLORADO REVISED STATUTES CONCERNING A TEMPORARY INCREASE IN CERTAIN STATE TAXES FOR ADDITIONAL PUBLIC EDUCATION FUNDING, AND, IN CONNECTION THEREWITH, INCREASING THE RATE OF THE STATE INCOME TAX IMPOSED ON ALL TAXPAYERS FROM 4.63% TO 5% FOR THE 2012 THROUGH 2016 INCOME TAX YEARS; INCREASING THE RATE OF THE STATE SALES AND USE TAX FROM 2.9% TO 3% FOR A PERIOD OF FIVE YEARS COMMENCING ON JANUARY 1, 2012; REQUIRING THAT THE ADDITIONAL REVENUES RESULTING FROM THESE INCREASED TAX RATES BE SPENT ONLY TO FUND PUBLIC EDUCATION FROM PRESCHOOL THROUGH TWELFTH GRADE AND PUBLIC POSTSECONDARY EDUCATION; SPECIFYING THAT THE APPROPRIATION OF THE ADDITIONAL TAX REVENUES BE IN ADDITION TO AND NOT SUBSTITUTED FOR MONEYS OTHERWISE APPROPRIATED FOR PUBLIC EDUCATION FROM PRESCHOOL THROUGH TWELFTH GRADE AND PUBLIC POSTSECONDARY EDUCATION FOR THE 2011‐12 FISCAL YEAR; AND ALLOWING THE ADDITIONAL TAX REVENUES TO BE COLLECTED, KEPT, AND SPENT NOTWITHSTANDING ANY LIMITATIONS PROVIDED BY LAW?
‐ Yes
‐ No